1.1BILL OF LADING. The terms and conditions of the Standard Truckload Bill of Lading, attached to this Service Guide as Exhibit 1 and hereby made a part of this Service Guide by reference, shall apply notwithstanding the use by Customer of any other bill of lading or shipping document. FX drivers are not authorized to bind FX to bills of lading or other shipping documents differing from the Standard Truckload Bill of Lading. The execution by drivers of bills lading or other shipping documents containing different terms and conditions will act only as receipts for the shipment.

1.2APPLICATION OF SERVICE GUIDE. All provisions of this Service Guide shall apply to every shipment handled by FX, whether in the absence of, or pursuant to, a written contract, unless expressly waived, in whole or in part, in a writing signed by an authorized representative of FX.

1.3MILEAGE GUIDE. Where rates are set forth in cents per mile or other calculation based on mileage, distances shall be determined by utilizing PC MILER. Mileage will be the distance between the point of origin and point of destination by the shortest regularly traveled available highway routes.

1.4REASONABLE DISPATCH. Unless arranged or agreed upon in writing prior to shipment, FX is not bound to transport a shipment on a particular schedule or in time for a particular market, but is responsible only to transport a shipment with reasonable dispatch, as that term is defined at common law. FX shall not be responsible for special or consequential damages resulting from delayed delivery.

1.5IMPRACTICAL OPERATIONS. Nothing in this Service Guide shall require FX to perform pick-up or delivery service at any location from or to which it is impracticable, through no fault or neglect of the FX to operate vehicles because of:

1.5.1

The condition of roads, streets, driveways, or alleys; or

1.5.2

Inadequate loading or unloading facilities; or

1.5.3

Severe weather conditions; or

1.5.4

Riots, Acts of God, the public enemy, the authority of law, strikes or labor unrest, the existence of violence, or disturbances such as create a reasonable apprehension of danger to persons or property.

1.6RATES AND SCHEDULES. FX’s rates, Pricing Guide, and this Service Guide are available at FX’s website (www.farruggio.com). FX may offer rates which differ from those set forth at its website on a shipper specific basis or on a “spot market” basis. Rates quoted are F.A.K. including driver stay-with time of one hour or in its Pricing Guide. Driver load/unload is not included.

1.7NOTICE AND AMENDMENTS. Upon written request, FX will provide its customers and shippers with copies of this Service Guide and applicable rates. Service Guides and assessorial charges are available on FX’s web site at: www.farruggio.com

1.8DEFINITIONS

1.8.1

The term “Customer” as used herein means the party requesting or contracting with FX for FX;s transportation and related services. The term includes shippers, consignors, consignees, rail, ocean and motor carriers, brokers and other intermediaries.

1.8.2

The term “Shipment” as used herein means a lot of freight received on behalf of one Customer, at one time and location, destined to one consignee at one location, covered by one bill of lading.

1.8.3

The term “Prenote” etc.

PRENOTE: All prenotes must have the drayage rate clearly shown to be considered a valid prenote. Any preapproved charges should also be shown. If rate is not shown, prenote will not be accepted. Prenotes must always be sent to the applicable terminal (otherwise prenotes will not be acknowledged

A SPECIAL RATE (SRQ): A number is required for any special rates due to volume, drop & pick, special equipment or points not listed. To request an SRQ, please contact the terminal servicing the specific ramp or pier involved to determine eligibility.

1.9ABBREVIATIONS AND REFERENCE MARKS. Explanation of abbreviations and reference marks:

@

=

Addition

(I)

=

Increase

(R)

=

Reduction

(C)

=

Change in wording which results in neither increase nor reduction

(D)

=

For any mileage not shown, use next greater mileage

VMW

=

Volume minimum weight

FS

=

Full Service - Loading and unloading included in rate

N/A

=

Not applicable

FMCSA

=

Federal Motor Carrier Safety Administration

STB

=

Surface Transportation Board

LB

=

Pound or pounds

LTL

=

Less-than-truckload

M

=

Thousand

MF

=

Motor freight

NOS

=

Not otherwise specified herein

TL

=

Truckload

STBOL

=

Standard Truckload Bill of Lading

SRQ

=

Special Rate Quote

FX

=

Farruggio’s Express, Inc.

SECTION 2 - SCOPE OF OPERATIONS

2.1TERRITORIAL SCOPE. FX is authorized by the Federal Motor Carrier Safety Administration (FMCSA) to engage in transportation as a motor carrier of property (except household goods) in interstate and foreign commerce between points in the United States at Docket No. MC-38481.

2.2SERVICE LIMITATIONS

2.2.1

FX does not hold out to transport jewelry, objects of art, currency, documents, and items of usual value or rare metals. FX shall not accept shipments of same and if tendered to or transported by FX in error, FX shall not be liable for theft or loss of or damage to same in excess of One Hundred Dollars ($100).

2.2.2

FX will not transport and shall not be required to accept for transportation any truckload shipment which exceeds in pounds the legal maximum weight or which occupies more than the full visible capacity of the trailer which is provided. FX will not be required to transport overweight or over dimensional loads.

2.2.3

Due to a variety of highway restrictions in FX’s operating area, container or trailer equipment over 96 inches wide or over 45 feet long may in some instances be deemed illegal to be operated on certain highways or portions thereof. Customer shall be responsible for all violations, fines, and delays resulting from equipment being deemed over width or over length in accordance with applicable local, state, or federal laws. Customer is responsible for payment all fines and costs incurred or to reimburse to FX for same. To avoid violations, when practical, an out-of-route mileage charge will be added to travel a legal but less direct route. Please consult with the applicable FX terminal.

2.3HAZARDOUS MATERIALS. Load must be secured by shipper to meet AAR or Steamship lines standards as well as the Department of Transportation rules regarding blocking and bracing. IMC, Broker, or Shipper must make sure that they have secured the load to the ruling specification and all the placards and paper work are proper and will be forwarded. We will not move Hazardous material without these conditions being met. We will hold IMC, Broker and Shipper responsible for all failures to comply and any failure as a result of non-compliance.

2.5APPOINTMENTS/PICKUP AND DELIVERY TIMES. Appointment times for pick-ups and deliveries shall be made at no charge by each of FX’s Terminals upon Customer request. FX shall not be liable for appointments missed. FX is obligated to pick up and deliver shipments with reasonable dispatch and is not obligated to make delivery on a specified schedule. FX’s drivers are not authorized to bind FX in derogation of this rule and the driver’s signature serves only as a receipt for a given shipment.

2.6PICKUP AND DELIVERY. The rates named herein include pickup or delivery at all points within the limits of the cities, towns, villages and other points from and to which rates apply. Each shipment will include only one pickup and one delivery.

2.7SHIPPER LOAD AND COUNT (“SLC”). All shipments shall be loaded by the consignor and unloaded by the consignee. FX’s drivers are instructed to sign bills of lading as shipper load and count or “SLC”. Inadvertent omission of this notation shall not result in a presumption of FX liability for shortage or damage (in the absence of upset or accident) where the driver was either not present or not permitted to observe loading and unloading,

2.8FREE TIME. FX shall allow two (2) hours of free time for loading and two (d2) hours of free time for unloading for containers or trailers with power units and drivers.

2.9SUBSTITUTED SERVICE. For its operating convenience, FX reserves the right to substitute another qualified motor carrier to provide service in replacement of FX. If FX substitutes another motor carrier, FX shall protect the rates and charges agreed upon with Customer when substituted services are provided and warrants that all terms, conditions, duties and obligations provided for by this Service Guide and any contract with Customer shall be provided.

SECTION 3 ACCESSORIAL CHARGES

3.1APPLICATION OF ACCESSORIAL CHARGES. In addition to the line haul or Base rate for any shipment and unless otherwise agreed in writing, the following accessorial charges shall apply and shall be reflected on FX’s invoice(s) for services rendered. Confirmation must be received from the applicable terminal within two days.

3.2DETENTION – VEHICLES WITH POWER UNITS

3.2.1

This item applies when an FX vehicle (driver and power unit) is detained in excess of two (2) hours at the place of delivery or at the place of pick-up, when such delay is not the fault of FX.

3.2.2

Detention charges will be invoiced to Customer at the rate set forth in the consignee in the case of unloading and to the shipper in the case of loading at the rate set forth in FX’s Pricing Guide.

3.2.3

When computing detention charges, the beginning time shall be when the driver notifies the shipper or consignee that the equipment is available for loading or unloading, as the case may be, but in no case shall time commence prior to the time of any appointment or the actual time of loading or unloading, whichever is first and time shall end when the equipment is ready to depart.

If, at the end of the business day, unloading has not been completed and cannot be completed that day, the shipper or consignee shall be given the following options:

a

FX may, at Customer’s cost and expense, return to the closest FX terminal with the freight still contained in the trailer or container and shall return the following day to unload the balance of the freight at the commencement of shipper’s or consignee’s work day; or,

b

FX will spot trailer at shipper or consignee location and return the following day, and further, trailer will be subject to charges for detention without power pursuant to Item 310 beginning immediately upon spotting of the trailer; and,

c

In either case, any unused free time from the first day will continue into the second day, detention charges to commence when all free time has expired.

3.2.6

If a vehicle is both unloaded and reloaded at the same site, each transaction will be considered separately and free time shall apply to each separately.

3.2.7

FX shall provide copies of detention calculations and underlying records to Customer, and shipper or consignee for either’s review

3.3DETENTION – VEHICLES WITHOUT POWER UNITS

3.3.1

This item applies when FX stations or spots a trailer at the request of Customer for loading or unloading.

3.3.2

FX shall allow the day of arrival plus the next calendar day free time per trailer or container for loading or unloading at the facility where spotted.

3.3.3

Time shall commence with the spotting of the trailer or container and shall end when FX is notified by the Customer or other party on behalf of Customer.

3.3.4

If a trailer or container is both unloaded and re-loaded at the facility where spotted, an additional consecutive, calendar day free time shall be allowed.

3.3.5

After expiration of free time as provided herein, charges for detaining a trailer or container beyond free time shall be as set forth in FX’s general rules.

3.4LOADING AND UNLOADING / LUMPER CHARGES. Rates in this Service Guide Contemplate loading of the freight by the consignor at origin and the unloading of freight by the consignee at destination. If Customer requests and FX furnishes labor to load or unload the vehicle, all charges for such outside labor are to be paid by Customer. [The shipper or consignee], who will be billed for actual time of labor. Labor charges for loading and unloading are set forth in FX’s Pricing Guide. [$100 for the first hour and $75 for each our thereafter. If the driver is required to assist with loading and/or unloading, a charge of $100.00 per hour will be assessed in addition to all other applicable charges. All charges for additional labor shall be cost plus $25.]

3.5PALLET EXCHANGE / CONTAINER RATES. In those instances where Customer [a party] requests FX to perform pallet exchange services, said service will be performed by FX at a charge set forth in FX’s Pricing Guide. [Of $15.00 per pallet]. Such charge shall be in addition to all other applicable rates and charges. Requests for pallet exchange service must be noted on the bill of lading at or before the time of pick-up. Charges for this service will be billed to Customer. [The party paying the freight charges].

Add $100.00 minimum to the regular rate for moves to or from pier facilities. Please contact the applicable terminal for exact pricing.

3.6REDELIVERY CHARGES. Load must be secured by shipper to meet AAR or Steamship lines standards as well as the Department of Transportation rules, to blocking and bracing. IMC or Broker or Shipper must send us a certified statement confirming that they have secured the load to the ruling specification and all the placards and paper work are proper and will be forwarded with the certification, we will not move Hazardous material without these conditions being met.

3.7VEHICLE REQUESTED AND NOT USED. When an order is placed by a Customer For a vehicle and, due to no disability, fault or negligence on the part of the FX, the vehicle is not used; cancellation of the order must be made before the vehicle is dispatched for pick-up in compliance with such order. If cancellation is not made prior to dispatch, FX’s rate for the services requested will be assessed.

3.8COLLECT ON DELIVERY (“COD”). FX does not hold out to provide COD services. FX’s drivers are not authorized to accept shipments which require the consignee to pay the driver for the goods transported. If a COD shipment is inadvertently accepted and delivered without obtaining payment or if payment is stopped on an uncertified check, shipper’s sole recourse shall be to the consignee. FX shall not be held liable for failure to collect COD charges.

3.9ADDITIONAL LICENSE AND PERMIT FEES. Whenever any additional licenses or permits are required, including but not limited to, foreign commerce or customs fees, the charges for same shall be itemized and added to the FX’s freight charges.

3.10RECONSIGNMENT OR DIVERSION. A request for the reconsignment or diversion of a shipment will be subject to the following definitions, conditions and charges:

3.10.1

A request for reconsignment or diversion must be confirmed in writing, which shall include facsimile transmissions.

3.10.2

A reconsignment prior to movement of a shipment shall bear the rate that would otherwise have applied if the shipment was originally scheduled for movement to the new destination.

3.10.3

A diversion or reconsignment en route shall bear a charge as set forth in FX’s Pricing Guide as well as FX’s freight charges from origin to point of reconsignment or diversion and from there to final destination, via the reconsignment or diversion point. If the shipment is returned to origin, the rate to be applied will be the applicable rate to the most distant point actually traveled, plus the applicable rate from there back to the origin.

3.11STOP-OFFS. The following provisions govern shipments on which additional stops in transit to partially load or unload have been requested.

3.11.1

A shipment received by FX, moving from one consignor at one point at one time and covered by one bill of lading, may be stopped in transit for partial loading and/or unloading at the request of a Customer.

3.11.2

The bill of lading shall designate the following:

a

Stop-off point or points and places.

b

The weight, quantities, markings, and description of articles to be loaded or unloaded.

c

The name and address of the party authorized to tender freight or to accept freight for unloading at point of stop-off.

3.11.3

FX’s driver shall obtain a written statement, such as a notation on the bill of lading or a separate document, of the quantity and description of the portion of the shipment to be loaded or unloaded at each stop-off point or on the bill of lading.

3.11.4

Stop-offs for partial loading or unloading will not be permitted on shipments where FX has no recourse to Customer (freight collect shipments where Section 7 of the bill of lading has been executed).

3.11.5

Freight charges on a shipment stopped to partially load or unload must be prepaid or guaranteed by the Customer.

3.11.6

The rate that shipper shall pay for FX’s stop-off service is set forth in the FX Pricing Guide. Each stop off will be entitled to one (1) hour of free time, before detention charges will be assessed. An out-of-route mileage charge may also apply (See Pricing Guide). Please consult with the terminal involved to determine the total charges to be incurred.

3.12EXPEDITED SERVICE/EXCLUSIVE USE. FX’s transportation service undertaking is to provide service with reasonable dispatch. FX is not bound to transport property in any particular vehicle, on any particular schedule, or in time for any particular market. FX is not responsible for any special or consequential damages arising from loss, damage or delay. Unless shipper makes special arrangements with FX for team drivers or special relays, shipper understands that truckload shipments will be transported from origin to destination by a single driver in accordance with the hours of service requirements contained in the FMCSR’s (49 CFR Part 395). In order to request exclusive use or expedited service, Customer must arrange same in advance with the FX terminal at origin and the bill of lading must be noted “FX requested to provide expedited or team service.” Charges for exclusive use, expedited and team drivers are set forth in FX’s Pricing Guide and will be in addition to all other applicable charges.

3.13PROOF OF DELIVERY CHARGE (“POD”). A charge of twenty-five ($25) dollars Will apply for providing proof of delivery (“POD”) on shipments where no exceptions were noted on the transportation documents.

3.17FINES AND COSTS – OVERWEIGHT SHIPMENTS. Customer shall be responsible party for payment of or reimbursement to FX, for any fines and other costs resulting from excess weight of any shipment that causes the FX to be in violation of any local, state, or federal law, when FX had no opportunity at the origin of the shipment to weigh same.

3.18EQUIPMENT DAMAGE/CLEAN. Damages of any kind incurred to equipment of any type (whether owned by FX or by another equipment provider) while at the facility of and/or under the care of the Customer, consignee, or consignor, will be Customer’s responsibility. FX shall have the right to recover its or other providers’ cost of repair and loss of use from Customer, consignee and consignor. Failure of Customer, consignor, consignee, or their respective agents to note damage at time equipment was delivered shall be prima facie evidence that the equipment was delivered in good condition. Customer, consignor and consignee shall be liable for the repair cost to any equipment damaged while spotted. Damage shall be noted by FX personnel at time of pickup of the equipment. Invoices to Customer, consignor or consignee for reimbursement of FX for repairs made shall be accompanied by supporting documents.It is the consignee’s responsibility to accept the entire contents of a trailer or container, including all cargo, damaged product, spillage, leakage, dunnage, etc. If the consignee does not properly clean out the empty vehicle, an additional charge, reflecting FX’s costs to restore the trailer or container to usable condition, such as washout costs, disposal costs, stop-off charges and possible out-of-route mileage-will be made. Customer and consignee will both be liable for such charges.

3.19FX’S RECOURSE TO CUSTOMER – CHARGES. All charges, including but not limited to rail storage, demurrage, rail or ocean carrier or terminal operator per diem, are the responsibility of Customer. FX has full recourse and permission of Customer, including but not limited to door moves with equipment owners, to seek and recover any and all funds from the shipper, consignee, etc. Approval must be received by the applicable terminal within two days.

3.20CHAINS AND BINDING. Transportation of chassis stacks requiring FX to furnish the chaining and binding will be assessed the charges set forth in FX’s Pricing Guide.

3.21WEIGH / SCALE CHARGES. FX will weigh loaded trailers or containers at Customer’s request and assess a charge for such service. The charge, set forth in FX’s Pricing Guide, will be in addition to the applicable scale fees and FX’s charges for transportation to and from the scale. Please consult with the applicable terminal to determine the total charges to be incurred.

3.22CASH ADVANCES. When FX is required to advance payment for per diem (except FX’s drivers) detention, demurrage or any other fee due upon pickup or delivery Customer shall reimburse FX for such costs, plus an administrative charge set forth in FX’s Pricing Guide.

3.23CHASSIS RETURN. When FX is required to return a chassis to a location other than the port, there will be a $120 fee plus daily charges

SECTION 4 CLAIMS LIABILITY AND LIMITATIONS

4.1LIMITATION OF FX LIABILITY. FX will not be liable for loss of or damage to any shipment or delay in pick up, transit or delivery thereof caused by (I) an act or default of the Customer and other parties involved; (ii) an Act of God, the public enemy, authority of law, quarantine, embargo, riot, strike, perils of navigation, or hazard and danger incident to a state of war; and (iii) freezing or spoiling of any perishable goods or property or natural shrinkage. FX shall not be liable for any special, incidental, indirect or consequential damages (including without limitation lost profits or business opportunity) or punitive or exemplary damages incurred or suffered by the shipper as a result of loss of, damage to, or delay of any shipments transported.

4.2RELEASED VALUE. All FX shipments are rated as Freight All Kinds for named customers and are subject to a maximum cargo liability of $4.00 per pound per article or $200,000.00 per trailer or container, whichever is less. This limitation of liability is reflected in FX’s rates and charges and applies regardless of whether such released value is stated on the bill of lading.

4.3SPOTTED EQUIPMENT. FX’s responsibility for cargo begins when FX takes physical possession of a shipment (whether an article, a package, a pallet, a container, or a trailer) and issues a bill of lading therefore. FX’s responsibility ends when the shipment is delivered, or in the case of trailers to be spotted at Customer’s request, when the loaded trailer is placed or spotted at the destination shown in the bill of lading.

4.4ADDITIONAL LIABILITY LIMITS. In no event shall FX's liability for cargo loss or damage exceed the maximum set forth in any through bill of lading or otherwise agreed to between the shipper (or beneficial owner) and FX’s Customer.

4.5RELEASED EVALUATION / USED MACHINERY. Unless otherwise agreed in writing, all used machinery is released to a maximum evaluation of $.10 per pound per article.

4.6PROTECTIVE SERVICES. FX will provide no protective service for temperature Sensitive cargo and shall not be liable for any loss or damage to such cargo.

4.7SHIPPER CONTROLLED EQUIPMENT POOLS. FX will not accept liability for damage to equipment or loss, damage, or theft of cargo while in the care and custody of the Customer or other parties involved in the transaction.

4.8STORAGE LIABILITY.FX supplies yard parking for our customers' loaded or empty equipment when needed. We provide this service free of charge. Although we provide free parking, we do not offer any commitment on the level of security.

Under such circumstances FX shall have no liability for theft of the yard-parked trailer or container or its contents. Neither customer nor customer's insurer will assert any claim against FX on account of theft, pilferage, vandalism, or damage of or from yard-parked trailers and containers.

SECTION 5 – FREIGHT LOSS AND DAMAGE CLAIMS.

5.1STANDARD OF LIABILITY. FX’s liability for loss, damage and delay and disposition of claims for loss, damage, or delay shall be governed by 49 U.S.C. 14706 (the Carmack Amendment), the regulations of the FMCSA at 49 CFR Part 370 (Principles and Practices for the Investigation and Voluntary Disposition of Loss and Damage Claims and Processing Salvage) and the terms and conditions of the Standard Truckload Bill of Lading (Exhibit 1, hereto) regardless of whether the shipment out of which the claim arose was interstate, intrastate, exempt or otherwise.

5.2FILING OF CLAIMS

5.2.1

A claim for loss or damage to freight shall not be paid by FX and FX shall not be held liable for loss or damage unless a written claim, meeting the requirements of (5.2.2) below is filed within nine (9) months from the date of delivery, or in the event there was no delivery, nine (9) months and one (1) day from a reasonable time at which delivery should have been accomplished. If a claim involves concealed damages, Customer must notify FX within forty-eight (48) hours of delivery so that an investigation may be begun to determine whether the damage was incurred in transit, or before or after transit.. Any suit to recover for loss, damage or delay to freight must be instituted no later than two (2) years and one (1) day after the claim is denied in whole or in part.

5.2.2

A communication in writing from a claimant, filed with FX within the time limits specified in this Service Guide or any agreement between FX and customer varying the Service Guide time limits and (1) containing facts sufficient to identify the shipment (or shipments) of property involved; (2) asserting liability for alleged loss, damage, injury or delay; and (3) making claims for the payment of a specified or determinable amount of money, shall be considered as sufficient compliance with the provisions for filing claims embraced in the bill of lading or contract of carriage or applicable contract between FX and shipper.

5.2.3

Documents not constituting claims such as bad order reports, appraisal reports of damage, notations of shortages or damage, or both, on freight bills, delivery receipts, or other documents, or inspection reports issued by shipper or its inspection agency, whether the extent of loss or damage is indicated in dollars and cents or otherwise shall, standing alone, not be considered as sufficient to comply with the minimum claim filing requirements specified in subparagraph (b) above.

5.2.4

Whenever a claim is presented against FX for an uncertain amount such as “$100 more or less,” FX shall determine the condition of the shipment involved at the time of delivery by it, if it was delivered, and shall ascertain as nearly as possible the extent, if any, of the loss or damage for which it may be responsible. It shall not, however, voluntarily pay a claim under such circumstances unless and until a formal claim in writing for a specified or determinable amount of money shall have been filed in accordance with the provisions of (5.2.2) above.

5.3ACKNOWLEDGMENT OF CLAIMS

5.3.1

FX shall, upon receipt in of a timely, written claim complying with 5.2.2 above in the manner and form described in these regulations, acknowledge the receipt of such claim in writing to the claimant within thirty (30) days after the date of its receipt by FX unless FX shall have paid or declined such a claim in writing within thirty (30) days of the receipt thereof. FX shall indicate in its acknowledgment to the claimant what, if any, additional documentary evidence or other pertinent information may be required by it to further process the claim as its preliminary examination of the claim, as filed, may have revealed.

5.3.2

FX shall, at the time each claim is received, create a separate file and assign thereto a unique claim file number and note that number on all documents filed in support of the claim and all records and correspondence with respect to the claim, including the written acknowledgment of receipt and, if in its possession, the shipping order and delivery receipt, if any, covering the shipment involved. At the time such claim is received, FX shall cause the date of receipt to be recorded on the face of the claim document, and the date of receipt shall also appear in FX’s written acknowledgment of receipt to the claimant.

5.4INVESTIGATION OF CLAIMS

5.4.1

Prompt investigation is required. Each claim filed against FX in the manner prescribed herein shall be promptly and thoroughly investigated if investigation has not already been made prior to receipt of the claim. Unless perishable commodities are involved, the shipper or consignee in possession shall afford FX five (5) days to inspect any damaged shipment prior to disposition of same.

5.4.2

When a necessary part of any investigation, each claim shall be supported by the original bill of lading, evidence of the freight charges, if any, and either the original invoice containing invoice value, a photographic copy of the claim to be true and correct with respect to the property and value invoiced in the claim; or certification of prices or values, with trade or other discounts, allowances or deductions of any nature whatsoever and the terms thereof, or depreciation reflected thereon; provided, however, that where the property shows on the bill of lading or where the invoice does not show price or value, or where the property involved has not been sold, or where the property has been transferred at bookkeeping values only, FX shall, before voluntarily paying a claim thereon, require the claimant to establish the destination value in the quantity shipped, transported, or involved and certify the correctness thereof in writing or show an alternative applicable value arising by reason of alternatively applicable contract terms.

5.4.3

Verification of loss. When an asserted claim for loss of an entire package or an entire shipment cannot be otherwise authenticated upon investigation, the carrier shall obtain from the consignee of the shipment involved a certified statement in writing that the property for which the claim is filed has not been received from any other source.

5.5DISPOSITION OF CARGO CLAIMS. FX shall pay, decline, or make a firm compromise settlement offer in writing to the claimant within one hundred twenty (120) days after receipt of the claim by FX; provided, however, that if the claim cannot be processed and disposed of within one hundred twenty (120) days, at that time and after expiration of each succeeding sixty (60) day period while the claim remains pending, FX shall advise the claimant in writing of the status of the claim and the reason for delay in making final disposition thereof and shall retain a copy of each such advice to the claimant in its claim file thereon.

5.6SALVAGE. Whenever property transported by FX is damaged or alleged to be damaged and is, as a consequence thereof, not delivered or is rejected or refused upon tender thereof to the owner, consignee, or person entitled to receive such property, FX, after giving due notice, wherever practicable to do so, to the owner and other parties that may have an interest therein, and unless advised to the contrary after giving such notice, shall undertake to sell or dispose of such property directly or by the employment of a competent salvage agent. FX shall only dispose of the property in a manner that will fairly and equally protect the best interests of all persons having an interest therein. FX shall make an itemized record sufficient to identify the identity of the goods sold and the buyer(s) thereof.

5.7DISPOSITION OF OVERAGE. Consignee shall accept overages in fulfillment of its duty to mitigate damages. Overages will be returned to the consignee or shipper by FX upon request in return for payment of FX’s applicable freight charges. In the event consignor and consignee decline to accept overages and mitigate damages, FX shall treat any overage as salvage and after notice shall sell same in accordance with the bill of lading contract and the terms of this Service Guide. The proceeds of any such sale less FX’s freight, storage charges and expenses of sale shall be remitted to the person or persons lawfully entitled to receive same. FX shall not be liable for any difference between the sales price of overage and the destination market value where the shipper and consignee decline to mitigate damages.

5.8CONTESTED FREIGHT LOSS AND DAMAGE CLAIMS. Unless the parties agree to voluntary alternative dispute resolution, disputed claims will be subject to 49 U.S.C. §14706 (the Carmack Amendment) subject to any applicable released valuation. Customer and all those claiming through Customer waive any right to setoff or offset of contested claims against freight charges due to FX.

SECTION 6 COLLECTION AND PAYMENT OF FREIGHT CHARGES

6.1INVOICES. FX shall invoice Customer or other party no later than fifteen (15) days of Providing service. FX will retain delivery receipts and proofs of delivery, which will be provided upon specific request in accordance with the provisions of this Service Guide.

6.2PAYMENT WITHOUT OFFSET. Customer or other responsible party shall pay all freight charges when due without offset for any cause, including but not limited to, freight loss and damage claims. All claims for loss or damage shall be governed by this Service Guide and neither Customer, consignor, nor consignee shall deprive FX of proper cargo insurance adjustment by unilateral deduction of claims from payment of freight charges due.

6.3INTEREST AND FEES ON PAST DUE ACCOUNTS. All payments are due within Fifteen (15) days of invoice. FX will assess one and one-half percent (1 ½%) per month on past due indebtedness due for more than Thirty (30) days. In the event FX deems it necessary to retain the services of legal counsel to collect any outstanding indebtedness and is successful in collecting all or part of such indebtedness, customer and any other party responsible for payment of indebtedness to FX shall pay attorneys’ fees in the amount of Five Hundred ($500.00) dollars or thirty-three percent (33%) of the amount recovered by FX, whichever is greater. Customer and any other party responsible for the payment of indebtedness to FX consents to the jurisdiction of the Courts of Philadelphia and Bucks Counties, Pennsylvania or the United State District Court for the Eastern District of Pennsylvania, at FX’s option.

6.4THIRD PARTY BILLING. FX does not employ or engage property brokers or other intermediaries as its agents for the solicitation of shipments or the collection of freight charges. FX will invoice the shipper’s broker or other agent for freight charges. FX reserves the right to bill and collect freight charges from the shipper on prepaid shipments or the consignee on collect shipments in the event full payment of freight charges is not received pursuant to third party billing. A shipment in which charges are to be paid by a party other than the consignor or consignee will be accepted provided recourse to the consignor is preserved with FX picking the shipment up at origin. The consignor and consignee guarantee to pay the charges if the third party fails to do so in Thirty-five (35) days from date of invoice. Any such shipment will not be accepted if the consignor executes a nonrecourse provision of the bill of lading.

6.5PRIORITY OF FREIGHT CHARGE OBLIGATION. If an intermediary makes an arrangement for transportation services provided by FX and the intermediary in turn bills the shipper or beneficial owner of the goods for freight charges inclusive of FX’s rates, the following rules shall apply:

6.5.1

The intermediary will segregate funds due and owing to FX from other accounts.

6.5.2

Intermediary will pay FX without offset from funds received and shall not commingle, pledge, encumber or hypothecate funds received by it intended for payment of freight charges to FX.

6.5.3

When the intermediary arranging service by FX is a carrier or freight forwarder, a constructive interline trust shall apply in FX’s favor.

6.5.4

When the intermediary is a property broker, the regulations set forth at 49 C.F.R. §371 shall apply and monies received by the broker shall be segregated from its other assets and liabilities.

6.5.5

In no event shall accounts receivable pledged or encumbered by any intermediary be inclusive of freight charges billed by it to the extent those freight charges are owed to FX.FX shall have recourse for payment of its freight charges to the beneficial owner of the freight and those other entities who received the benefit of FX’s service.

6.6LIEN FOR FREIGHT CHARGES. FX shall have a possessory lien on shipments in its possession for the payment of freight charges both past and present.